Learning from Ireland

The trouble with examining miracles is that they often turn out to be less miraculous than a product of determination and plenty of hard work. So it proved to be Monday when Maine was introduced to the Irish economic miracle — and found that Ireland has spent decades doing the sort of planning and investment that Maine usually just talks about.

The 25th annual Governor’s Economic Development Conference showcased the Celtic Tiger, the name given to an economy that has changed a century of lagging development, unemployment woes and emigration problems. By transforming itself into a world leader for high-tech industries, Ireland’s economic growth has outpaced its neighbors, its unemployment has fallen, incomes are up and inflation low. Significantly, it has lately become a place people move to in search of opportunity. The lessons for Maine in this are many, but this state would be well on its way if it adopted, vigorously and wholeheartedly, only four.

Forty years ago, Ireland decided that an improved education system was its best hope for succeeding in the future. It invested in education as if it truly meant it, and the number of citizens attending institutes of higher education soared. Just as in Maine and nearly everywhere else, the more education people have, the larger the salary they are likely to receive. But more than simply offering more education, Irish leaders listened to businesses and ensured that they were training students for high-value jobs that could lead to successful careers.

A well-trained work force, however, would not attract the kind of investment Ireland has seen without a good deal of help from a low corporate tax rate — Ireland’s is a flat 10 percent. Maine, because it has no control over federal tax rates, cannot offer the same, but it can and should better design its tax laws to attract specific kinds of businesses. That means nothing less than a top-to-bottom examination of its tax system, a need that became clear in the recently concluded legislative session, when lawmakers, supporters and opponents, stumbled over the state’s Business Equipment Tax Reimbursement program. Many did not know whether the tax break was highly effective or could and should be replaced with something better.

Whatever Maine does, however, speakers at the governor’s conference were consistent in speaking in favor of consistency. The refrain was that businesses don’t like surprises. This absolutely does not mean that Maine should cling to laws it knows are dangerous to its people or environment. But it does mean that it should legislate with the idea that its laws will be around long after a specific problem has gone away. So, for instance, reforming workers’ comp should be done not only to help Maine survive a cost crisis in that system but also with an eye on protecting workers once the crisis is over.

Finally, what permeated the discussions of each of Maine’s Irish guests was the element of risk. Ireland for a couple of decades spent heavily itself and, in 1987, nearly went broke doing so. It survived, then prospered, by having determined leaders who had identified where they wanted Ireland to go and held firm in their belief. They gained support by the fact that Ireland had been in such difficult circumstances for so long that potential opponents had few alternatives to point to. Still, it could not have been easy for these leaders to make bold economic plans and then stand by them in the hard times.

The hope, of course, is that Maine does not feel obliged to endure the same desperation before it acts. It too needs leaders who can sit down together, identify where Maine should be on the move to, build public support for bold policies and then stick with them. Actually, there would be a small miracle in that.